Switzerland’s Top500 - Creating a Vision for Sustainable Growth

How do Swiss companies stay on top of their game in volatile times? What strategies do they employ to ensure sustainable growth? For the third year in a row, Accenture analyzes the revenues and profitability of the 500 largest Swiss companies (the so-called Top500; excluding the financial sector) and identifies the fastest growing companies among them.

Overview

The study reveals the factors responsible for the success of these Growth Champions, and highlights how important global expansion strategies are for Swiss companies. Additionally, this year the report investigates the challenges and opportunities presented by social and environmental trends and the demand for sustainable business practices in future growth markets. Based on best practices adopted by the Swiss Growth Champions and some of their peers, the study shows how sustainability can offer companies an opportunity to drive top-line growth.

The study identifies 26 top performers or Growth Champions, among Switzerland’s Top500. These are companies that have outperformed their industry peers and the Top500 group on average growth rates over the past five years. They also exceeded their industry peers’ return on sales and equity. While only 10 of last year’s 22 Growth Champions make it to this year’s list, only five companies have appeared on the top-performers’ list three years in a row.

Most of the Growth Champions recognize sustainability as an opportunity and are adapting their portfolios and business practices accordingly. The UN Global Compact-Accenture CEO Study on Sustainability 2013 has identified seven approaches to sustainability that are enabling leading companies to create significant value, while addressing global sustainability challenges. The study Switzerland’s Top500 – Creating a Vision for Sustainable Growth illustrates these seven steps to sustainability by using case studies of big Swiss international players.

Analysis

The following factors play an important role in the success of the top-performing Swiss companies:

The top-performing Swiss companies recognize the limitations to growth in the domestic market. They are increasingly concentrating their efforts abroad—particularly in the Asia-Pacific region to boost revenue.

The Swiss economy is extremely competitive and generates an account surplus, which can finance foreign direct investments as well as mergers and acquisitions abroad. In the last five years, Swiss companies acquired control of foreign companies worth Swiss Francs 88.2 billion (US$98.6 billion) and improved their competitive position abroad.

Superior revenue growth abroad has a positive effect on domestic markets and increases national employment. The study shows that between 2008 and 2012, the Growth Champions created 21.1 percent more jobs in the domestic market.

Compared to their peers in Germany and Austria, the Swiss Top500 invested more in the business process outsourcing (BPO) sector. Thus, Swiss companies not only benefited from lower labor costs, but also from greater efficiency, streamlined operations and agility.

Recommendations

The study gives valuable insights into what Swiss companies need to focus on to ensure sustainable growth and offers the following recommendations:

Growth is international: A strong presence through structured collaboration in markets across the world is needed to grow revenue beyond saturated domestic markets.

Growth requires flexibility: High salaries in the developed world necessitate a rethink on domestic value chains. BPO markets across the world now encompass all major processes in a company, ranging from communication and marketing to risk management and legal services.

Social and environmental conditions influence growth opportunities: Given the growing influence of social and environmental trends on the development of markets, future Growth Champions need to pursue a more sustainable course. They need to treat sustainability as a means of differentiation and as an opportunity for growth.

Better approach to sustainability is needed: Many Swiss companies are still not providing any information on their efforts to integrate sustainability considerations into their growth strategy. This suggests that some of them are not well positioned for true sustainable growth.